ING predicts Belgium’s economic growth will align with European average

Belgium’s economy, which has outpaced the European average since the pandemic, is expected to slow down in the coming years, aligning with the eurozone’s growth rate. According to ING, this shift could occur if the next government enacts its planned austerity measures.

ING bank’s chief economist Peter Vanden Houte highlighted on Wednesday that public sector spending has been the main driver of Belgium’s economic growth in recent years, while private sector growth remained more modest. ING forecasts a 0.7% growth rate for Belgium in 2025, which would match the eurozone average. For 2026, Belgium’s growth is expected to fall slightly below the eurozone average, at 1% versus 1.3%.

Uncertainty surrounds Europe’s economic outlook, particularly with Donald Trump returning to the White House. The president-elect has repeatedly said he would increase trade barriers. Vanden Houte also pointed to weakened Franco-German cooperation and growing euroscepticism as challenges to large-scale European initiatives. Additionally, energy prices in Europe remain high. 

On a positive note, wage increases and lower inflation are boosting purchasing power across Europe. However, ING predicts economic uncertainty will lead to higher savings rates rather than increased consumer spending.

Belgium’s high debt levels also pose risks. Without a credible budget plan from the next government, the country could face rising borrowing costs. Still, Vanden Houte noted that Belgium could leverage domestic capital markets, as it did successfully with recent state bond issues, to mitigate financial strain.

ING also warned that Europe may see inflationary pressures return, driven by food prices and potential US protectionist policies. Interest rate cuts are expected to continue into the summer, but central banks remain cautious in the face of supply shocks.

^{The headquarters of the ING Belgium banking group in Brussels © BELGA PHOTO BENOIT DOPPAGNE}